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EU tells Greece to cut more

EU tells Greece to cut more
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EU Economic and Monetary Affairs Commissioner Olli Rehn has urged Greece to quickly announce further austerity measures to tackle its debt crisis.

Rehn made the call after his first round of talks with Greek officials including Finance Minister George Papaconstantinou.

He promised EU help for Athens to overcome the problem that has shaken the euro zone.

Rehn said: “Additional consolidation measures are necessary to ensure that the four percent target of deficit reduction for this year 2010 is met.”

Prime Minister George Papandreou appeared to be preparing Greeks for more sacrifices in broadcast remarks at a cabinet meeting appealing for public support.

“The crisis in our country is not limited to our fiscal problem. It is only the tip of the iceberg. It is extremely urgent to deal with it because it has assumed dramatic dimensions,” Papandreou said.

Reportedly, euro zone governments are discussing possible mechanisms to support Greece if necessary on the international bond markets.

The region’s biggest economy, Germany, would bear the brunt of any joint action but Chancellor Angela Merkel said: “We have a [European] treaty under which there is no possibility of paying to bailout states in difficulty. That means we can only help Greece for the moment by supporting Greece in getting its affairs in order.”

A German member of the European parliament has said that Germany, France and the Netherlands are planning to buy Greek government bonds through state-owned financial institutions and Merkel did not explicitly rule that out.

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